Dollar touches the 150 level against Yen with a boost from Powell’s statements and Treasuries

On Friday, the dollar briefly touched the 150 level against the closely watched yen, supported by a rise in US 10-year Treasury bond yields towards 5 percent after Federal Reserve Chairman Jerome Powell indicated that there was room to implement further interest rate hikes.

The yield on ten-year US Treasury bonds, which touched five percent for the first time in 16 years overnight, rose by 30 basis points this week, representing the largest weekly increase seen since April 2022.

The war in the Middle East pushed investors to safe-haven assets such as gold and the Swiss franc, but interest rates dominated trading trends in Treasury bonds.

However, this did not provide similar support to the dollar this week, which made only marginal gains short of clinging to the 150 level against the yen, the point at which many market participants believe the Japanese Ministry of Finance could intervene to support the currency.

After the dollar rose against the yen by as much as 0.14 percent on Friday to 150, it fell to settle at 149.870, and this exchange rate usually tends to track the movements of 10-year Treasury yields.

In a closely watched speech on Thursday, Fed Chairman Powell said that the strength of the US economy and continued strength in labor markets may require tighter borrowing conditions to control inflation. However, he added that rising market interest rates may reduce the need for the central bank to take action.

On the other hand, the British pound fell by as much as 0.37 percent to record its lowest level in two weeks after a series of data showed the collapse of British consumer confidence in October after recording weak retail sales in the previous month.

The British pound fell in recent trading by 0.2 percent to $1.2116.

The euro stabilized at $1.0572, while the Swiss franc, which was popular as a safe haven, tended to record its largest weekly gain against the dollar in three months, rising by one percent.

On Friday, the Swiss franc recorded its highest level against the euro since 2015, when the Swiss National Bank canceled the peg between the two currencies. The Swiss franc settled in the latest trading at 0.94345 against the euro.

In Asia, the Chinese yuan settled in the offshore market at 7.3361 per dollar, after China kept its key lending interest rates unchanged in the monthly review on Friday, which is consistent with market expectations.